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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 222.35+7.1%3:21 PM EST
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To: Pravin Kamdar who wrote (121766)5/18/2004 11:43:37 AM
From: pgerassiRead Replies (1) of 275872
 
Dear Pravin:

They have not spun down the amount produced. How many Opterons are shipping now on 130nm? How many AFXs? What's 10% or so of that? That does not get you to 100K CPUs to be sold in 5 weeks of production. To do that, initial runs need to be 250 to 300 wafers a week or 5% of the fabs total output.

Remember that the initial run's yield is guess work. Both AMD and Intel have been burned when the rocket lots looked ok, but the production stuff was lousy. Prescott suffers this even now, months into production shipments. So you want AMD to remove some large portion of 130nm production to run initial 90nm production. 5% is just too much.

Better to run 100 wafers a week or 2% of the fab's capacity for those heart wrenching 13 weeks of initial production. Then if yields are "out of sight", like 80 or 90%, and there are large orders from customers, do you really turn the knob up to 1 or 2K wafers a week. As more orders come in, you keep turning the knob up. By the end of Q4, you may be at 100% 90nm, but that would be an incredible ramp.

90% yield on mostly 70mm2 90nm 256K K8s would be 1.4 million CPUs a week or 18.2 million CPUs a quarter. At that rate, AMD would take better than 50% of the total CPU market revenue, mostly from Intel. Do you have any inkling of how much profit AMD would make with $5 billion in revenue per quarter? On how much loss would Intel suffer with just $4 billion in revenue?

I don't think that would happen, but it would be very nice if it did.

Pete
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